US Markets
Thursday, December 14th, 2023 3:54 pm EDT
Key Points
- Regional Sports Empire Vision: Ted Leonsis, owner of the NBA’s Washington Wizards and the NHL’s Washington Capitals, aims to build the world’s most valuable regional sports and entertainment company centered around Washington, D.C. The grand vision involves moving both teams to Alexandria, Virginia, as part of a $2 billion entertainment complex, potentially creating a business model with a valuation ranging from $10 billion to $15 billion. Leonsis envisions an integrated platform, Monumental Sports & Entertainment, that encompasses local teams, venues, and networks.
- Multi-Sport Ownership Strategy: Monumental Sports & Entertainment’s portfolio includes majority stakes in the Capitals and Wizards, the WNBA’s Washington Mystics, minor league hockey and basketball teams, esports organizations, arenas, including Capital One Arena in downtown D.C., and a regional sports network. Leonsis emphasizes a strategy focused on the Washington, D.C. market, intending to own a soccer and baseball team locally. The potential move of the Capitals and Wizards to Alexandria is part of a broader plan, and Leonsis is open to acquiring additional teams in the area, avoiding pursuits outside Washington, D.C.
- Potential for IPO and Sports Business Valuation: Leonsis hints at the possibility of an eventual initial public offering (IPO) for Monumental Sports & Entertainment, especially if the company achieves high-end revenue run rates and valuation. He sees sports organizations, including his, as undervalued and suggests that understanding the recurring revenue lines such as ticketing, sponsorships, and media rights positions these entities more like Software as a Service (SaaS) businesses. The market performance of public sports organizations has been unpredictable, but Leonsis anticipates a potential market for at-scale sports venues and operators, driven by changing dynamics in the sports world.
Ted Leonsis, the owner of the NBA’s Washington Wizards and the NHL’s Washington Capitals, has outlined a vision to transform his Monumental Sports & Entertainment into the world’s most valuable regional sports and entertainment company. Leonsis envisions a business model centered around Washington, D.C., with the potential for a $10 billion to $15 billion valuation and eventual IPO. This week, it was revealed that the Capitals and Wizards would move to a new arena in Alexandria, Virginia, as part of a $2 billion entertainment complex in 2028. Leonsis aims to expand his sports ownership to include a local soccer and baseball team, emphasizing the importance of a platform that includes local teams, venues, and networks. The growing multi-sport ownership strategy seeks to offer a competitive advantage by combining operational control of teams, arenas, and broadcast networks within one metro area. Leonsis anticipates that Monumental, expected to earn $650 million in revenue this year, could reach a $1 billion revenue quickly through organic growth. He suggests that sports organizations are undervalued and envisions a potential market for at-scale sports venues and operators, raising the possibility of a Monumental Sports IPO if the company achieves high-end revenue run rates and valuation.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/12/14/ted-leonsiss-vision-of-10-billion-regional-sports-empire-in-dc.html
